The UK’s mortgage market has changed profoundly over the last two weeks, as the country starts to feel the full effects of the COVID-19 outbreak.
Lenders have introduced mortgage repayment holidays; thousands of new mortgage products have been pulled and the bank of England base rate still sits at 0.1%, its lowest level in history.
These sudden changes to the market have left a lot of people with more questions than answers.
And with additional government guidelines and information being released almost daily, it can be hard to keep up.
We’ve had many of our clients getting in touch to ask questions about their mortgage, seeking guidance on the next steps they should take.
With this in mind, we’ve taken some time out to create a list of the most frequently asked questions we’ve received over the last couple of weeks.
We hope you find the below Q&A helpful, and if we’ve missed something you’d like to know the answer to, please do get in touch.
Whether you’re seeking advice on your next home move, you’re looking to re-mortgage or want to protect your finances, we’re here to help.
Call us on 0161 443 4830 or email [email protected].
The Government has made it quite clear they don’t want anyone to move during lockdown.
Unless you’re experiencing exceptional circumstances that urgently require you to move, then its best you stay put.
Mortgage lenders are now extending the expiry date on offers by three months to allow more time for home movers.
Solicitors are also adding new clauses into contracts in case purchases don’t progress.
As with exchanges, the Government has asked that you don’t move unless you absolutely have to.
If you do have to move, then take extra precautions and carry out government rules on social distancing.
You must also follow government advice on hygiene and cleanliness throughout your move.
The Government requires all lenders to offer borrowers the opportunity to take a three-month payment holiday.
This payment holiday applies to homeowners, landlords and Help to buy purchasers.
The repayment holiday is available to borrowers who are up-to-date on their mortgage payments and not already in arrears.
For more information on payment holidays, read our comprehensive guide.
We believe that over 1 million borrowers have already requested a holiday.
So if you are struggling financially as a result of the Coronavirus outbreak, we think taking a payment holiday would be a sensible thing to do.
You won’t need to go through a means test or demonstrate your income drop and there aren’t any fees to pay either. However, I would like to stress that this is NOT free money, you will need to make up the missed payments in due course.
At the end of the three month holiday, you will need to agree higher repayments moving forward or extend the term of your mortgage with your lender.
Also, if you’re coming to the end of your term on your existing mortgage deal, then be aware that taking a repayment holiday could have an impact when you come to re-mortgage.
It could affect whether or not you can qualify for a re-mortgage or a new deal with your existing lender.
So, if you are looking to re-mortgage in the next 6 months, but will require a payment holiday, please do speak to us before engaging your lender, as it may influence the mortgage products available to you.
You mustn’t cancel your direct debit to the lender.
Simply cancelling the direct debit may cause issues later down the line when you come to the end of your payment holiday and could cause you to miss a mortgage payment in the future.
A missed mortgage payment will show on your credit file.
Lenders have been under extreme pressure over the last few weeks to answer the enormous uplift in queries.
At a time when they have significant operational challenges, there may be a delay in responding to your call/correspondence.
I would encourage you to wait a few days for things to quieten down and try again, or look online.
There may be an online form or link to request a payment holiday on the lender’s website.
Lenders have withdrawn a significant number of products, particularly trackers and those at higher loan to value’s, in recent days.
However, over 10,000 products are still available and rates remain at record-low levels.
Funding may become more constrained in the future, so if you are within six months from the end of your current deal, please get in touch and we’ll talk you through the options available.
All lenders look at your current income and expected or known changes when they access whether you can afford a mortgage.
With access to a comprehensive range of lenders from across the market, we can help you find a mortgage that’s right for you and that is affordable based on your income and expenditure.
Here, we have a dedicated team of mortgage experts on hand to offer you professional advice and guidance.
Whether you want to book a mortgage appointment or have a chat about the mortgage market, get in touch.
We can take appointments over the phone or via video conference depending on your preferences.
Call our team today on 0161 443 4830 and book your free consultation.
Or click here to book your appointment online.
* Your home/ property may be repossessed if you do not keep up repayments on your mortgage.